In our June edition of PCC Insight, Claire Oatway wrote about the ambitious plan of the NHS to meet net zero targets by 2040. Although financial support for primary care contractors is still slim, one element that will contribute to reaching this goal is assessing the energy efficiency of GP premises through the Energy Performance Certificate (EPC).
Regulatory framework
Contractors who lease their premises should ensure that their landlords are compliant with the minimum energy efficiency standards where new leases are entered into or to allow the premises to continue to be let. As of 1 April 2018, a commercial building can only be newly let if the Energy Performance Certificate (EPC) is of at least an E rating. On 1 April 2023, this changed to also include existing leases – buildings can only continue to be let if their EPC rating is E or higher. This was introduced by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.
This standard is enforced by local weights and measures authorities (LWMA) and landlords must not continue letting premises that do not meet the standard and may be fined if found to be doing so. In certain criteria, buildings can be exempt and landlords will need to register their building on the PRS Exemptions Register. It is the landlord’s responsibility to carry out improvement works to bring the building up to standard or to register the building as exempt if it meets the criteria.
Operational implications
What this could mean for GP premises, is that were premises do not meet the minimum standard, a landlord might be prohibited from continuing to lease the premises until remedial works are carried out – this could massively impact on the delivery of services from those premises. Equally, a new lease may not be entered into until improvement works are carried out and therefore delay a GP contractor from occupying the premises.
Contractors and integrated care boards (ICBs) who find themselves in this arguably extreme situation would need to make arrangements to deliver services from another suitable site. ICBs should therefore take an interest in the EPC rating of their practices to limit the risk of disruption to services. When a contractor is looking to enter a new lease and this is being reviewed by the ICB and the District Valuer Service or a leasehold rent review is taking place under the Premises Cost Directions (2024), ICBs should review the EPC to ensure it meets the criteria and the lease can go ahead.
Another situation where EPCs might become crucial is where GPs who own their premises are looking to carry out a sale and leaseback – this is where the GP owners will sell their premises to a third party to then lease the premises back to continue to provide services from the site. This is becoming increasingly popular with GPs who are looking to release equity from their premises. As both when a commercial building is being sold and then when it is leased, an EPC is needed of at least an E rating, this might require the GP owners to carry out some work to ensure the building achieves the required standard before it can be sold. ICBs should again review the EPC when assessing an application from a contractor regarding a sale and leaseback.
Working towards net zero
ICBs have a duty to work towards the NHS’s net zero goal, assessing EPCs should form part of this. It would be up to ICBs to establish a programme of proactively checking EPC ratings, however, this could be part of their estate strategy and the quality assessment of their estate into core, flex and tail.
EPCs can be searched for on the gov.uk page: Find an energy certificate – GOV.UK (www.gov.uk), although landlords can opt out from having their EPC published.
Safaa Jelassi, PCC Adviser
PCC provides expert advice and support relating to GP premises, contact enquiries@pcc-cic.org.uk to find out more.
